MYANMAR Law and Practice Contributed by: Kana Manabe, Thit Thit Aung, Julian Barendse and Nirmalan Amirthanesan, Myanmar Legal Mori Hamada
6.10 Squeeze-Out Mechanisms As noted in 2.1 Acquiring a Company , schemes of arrangement provide a means of squeezing out minor - ity shareholders who have not agreed to an acquisi - tion. In addition, the approval of an offer to acquire the shares of a public company by 75% of shareholders within four months of such an offer will give rise to a right on the part of the acquirer to acquire com - pulsorily the shares of dissenting shareholders upon notice within two months, subject to any objection proceedings. 6.11 Irrevocable Commitments Irrevocable commitments of shareholders in rela - tion to an acquisition are not used in Myanmar. This reflects the fact that a public takeover market has yet to develop in Myanmar.
7.4 Transaction Documents On 1 December 2020, the Office of the President issued Notification No 118/2020, further implement - ing the Extractive Industries Transparency Initiative (adopted in 2014 by Myanmar) by requiring all con - tracts in the extractives sector to be made public - ly available from 1 January 2021. This requirement has not been enforced to date. There are no broader requirements under Myanmar law for transaction doc - uments to be disclosed. Directors owe statutory directors’ duties to the com - pany under the MCL − for example, to act in good faith, in the company’s best interests, and with due care and diligence. These duties would apply to a director’s conduct in the context of overseeing M&A activities. Section 166 (e)(i) of the MCL provides that − when exercising their duty to act in good faith and in the best interests of the company − a director may consider the likely long-term consequences of their decisions, including the impact on employees, busi - ness relationships with customers and suppliers, the environment, and the company’s reputation. 8.2 Special or Ad Hoc Committees Special or ad hoc committees are not typically used for business combinations. 8.3 Business Judgement Rule 8. Duties of Directors 8.1 Principal Directors’ Duties While the business judgement rule applies in Myanmar under Section 165 (b) of the MCL, directors’ duties and this rule were only introduced in Myanmar as part of the MCL reform. As such, its application has yet to be tested in the country’s courts. 8.4 Independent Outside Advice The nature of independent outside advice is subject to the discretion of the directors. Typically, the direc - tors of a target company will retain independent legal advisers. 8.5 Conflicts of Interest The MCL provides for statutory directors’ duties, including the duty to act in good faith and in the com -
7. Disclosure 7.1 Making a Bid Public
Other than the disclosure obligations applicable to public companies described in 4.2 Material Share- holding Disclosure Threshold , there are no specific
legal obligations to make a bid public. 7.2 Type of Disclosure Required
Companies may issue shares to individual investors from time to time. However, a prospectus approved by the SECM would need to be prepared under the MCL and SEL in connection with an offer to the public − except in the situations described in Notification No 1/2020 of the SECM dated 15 May 2020 (eg, offers to prescribed classes of sophisticated investors). 7.3 Producing Financial Statements Financial statements do not have to be disclosed as part of any legal disclosure requirement for bids in Myanmar. Under the Myanmar Accountancy Coun - cil Law (Law No 31/2015), financial statements are required to be prepared in accordance with the Myan - mar Financial Reporting Standards, which are based on the International Financial Reporting Standards (IFRS).
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